Good news: Minnesota expects $876 million surplus

ST. PAUL, Minn. (AP) -- Minnesota budget officials are estimating a surprise $876 million surplus for the rest of the state's two-year budget, easing fears of another bruising political fight just months after partisan deadlock over how to close the last budget deficit led to a partial shutdown of state government.

Predictions at the Capitol had been pessimistic, with red-ink estimates ranging from $500 million to $1 billion. But budget officials said revenues came in $358 million higher than expected and spending was $205 million below earlier estimates.

The forecast wasn't all sunny. It projected a deficit of $1.3 billion for fiscal years 2014-15. The forecast said most of the reduced spending was in Health and Human Services.

The forecast will be updated again in February, when it will be used to guide budget talks.

Copyright 2011 by The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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